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Friday, June 23, 2017

Di Leo: Springfield – The City That Banned Capitalism

By John F. Di Leo -

Perhaps we should begin by acknowledging the fact that the headline isn’t exactly true. Springfield is a reasonably normal small town in the American Heartland, with a normal enough distribution of conservatives, liberals and moderates.

But Springfield is ruled by Chicago, the King Kong of Illinois politics, which, for all its good points (and yes, there are many), simply can’t help being utterly destructive to everything within reach. And because of its size, its reach is far-ranging indeed.

And the more desperate Chicago gets, confronted with fleeing residents, disappearing employers, and an increasingly impatient and demanding grubber list, the more Chicago acts like King Kong in the movies, smashing everything in sight, a danger to friends and enemies alike.

Illinois’ Assets

A researcher, blissfully unaware of politics, would never believe that Illinois could ever be broke. Blessed by a near-perfect geographical location, Illinois should be the financially strongest of American states.

A huge agricultural power, Illinois farmers produce soybeans, corn, and wheat… our ranchers produce hogs and cattle… and with terrific road and rail transportation, these products are shipped all over the world.

As a manufacturing powerhouse, Illinois has long been the home of so many businesses, it takes both the huge CTA and Metra rail lines just to bring the employees of Chicago’s business sector to and from work every day… and that’s not even counting the business activity in Illinois’ other employment hubs: Peoria, the Quad Cities, Rockford, Aurora, Decatur… Companies as world-renowned as John Deere, ITW, ADM, Walgreens, and Caterpillar call Illinois home, as do hundreds of other giants.

And what entertainment this state can provide! From theaters to museums, from restaurants to conference centers, golf courses and stadiums for every sport… and Illinois has international airports and a highway system designed to bring travelers and conventions to Chicagoland from around the Midwest or around the world, just to spend their money here.

There is simply no reason why Illinois should ever be broke. It is blessed with so much activity, it is a virtual revenue machine, some $34 billion in annual state tax revenues alone, not counting counties, cities, and other tax bodies.

Yes, the state of Illinois’ state government takes in $34 billion a year – more in annual tax revenue than most countries do. Certainly enough to fund whatever the state legitimately needs to do.

Illinois’ Deficits

But here we do have a problem. Illinois has institutional problems that overwhelm even all these advantages.

Massive crime, which not only vastly increases needed spending on city, county and state law enforcement, courtroom, and prison resources, but also depresses property values, and increases auto and property insurance costs, driving residents and employers out of state, raising the cost of living for those who remain.

An unsustainably-generous public pension system, one that promises most state workers more than the state could ever afford, either wholly unfunded or barely funded for decades now, essentially at the point at which 100% of state revenues now go to paying current and future pensions. Yes, you read that right, one hundred percent of state revenues.

A failed K-12 education system in our biggest cities, especially Chicago, in which a small percentage of children from connected or lucky families can get a suburban-quality education, but the vast majority are stuck in buildings that function more as taxpayer-funded gang recruiting centers than as schools.

A welfare system that obligates the state to make welfare payments of every kind, from food and housing to medical care and transportation, for a simply unaffordable percentage of its population. In economics, we supply-siders like to say, “you can grow yourself out of any problem”… but the supply-siders never met Modern Illinois.

Worst of all is the state’s legislature. Despite a number of stellar individuals in both the state house and senate (full disclosure; this first group includes both this writer’s state rep and state senator, Tom Morrison and Tom Rooney!), both houses are unfortunately ruled by Democrat majorities, which are in the iron death-grip of Chicago’s most intractable powerbrokers. Speaker of the House Mike Madigan has ruled over the majority in Springfield, with the exception of one brief two-year respite in the mid-1990s, since January, 1983.

With problems like these, it’s no wonder that they had to create a new rating for our bonds that’s lower than “junk”…

With problems like these, it’s no wonder that most politicians throw up their hands and ask “Why Bother?”… because as long as Mike Madigan’s in charge, nothing can change.

And with problems like these, it’s no wonder that Illinois is bleeding population and employment at a record rate… nearly 100,000 former residents left Illinois in 2016 alone.

But There Is A Solution!

As dismal as our situation is, there is a solution.

The supply-siders are NOT wrong. If you lower tax rates and government regulations enough to invite new business startups, enough to encourage existing businesses to expand, and enough to invite outside businesses to invest here, the numbers start to reverse themselves.

In Illinois, the problem isn’t so much the state income tax as other taxes and fees; reductions in the workmen’s comp costs, property taxes, sales taxes, and state and local regulations would make the difference. Illinois still has so many benefits, it could attract commerce again. We just need to correct the issues that scare employers away:

Driving down crime isn’t even hard; just have tougher sentencing on those who are caught, and stop inviting criminals in with Sanctuary City status! Our police risk their lives every day, and catch virtually every criminal… but we let them go, much too soon. A massive spike in mandatory sentencing, combined with cooperation with ICE to drive illegal aliens out of the state, would bring down Chicago’s crime levels, raising property values, cutting insurance costs, and making the state more welcoming to employers, residents, and tourists alike.

Cut the tax rates – especially the property tax. This can be managed – in fact, must be managed – by copying Wisconsin Governor Scott Walker’s successful public employee contracting reforms from 2011 (granted, they did it six years ago, as we should have, but there’s no time like the present!).

Politicians of the liberal stripe believe we cannot afford such things, certain that we need the revenue of high taxes to fund our obligations. But if we do the above, our obligations will shrink along with the revenue growth!

You don’t need to pay for the housing, food, transportation and medical care of the employed, only the unemployed. You don’t have unproductive city lots when taxpaying offices, stores, residents, and manufacturing plants move in.

The key problem with Speaker Madigan and his side of the aisle is they accept – even crave – the control of massive numbers of people. They refuse to allow capitalism – the wonder of the free market – to solve our state’s problems, and they put every barrier they can in capitalism’s way, because the modern American Left likes having huge segments of the population utterly dependent on them.

The problem for Mike Madigan and his acolytes, as they are eventually going to have to admit, is that Prime Minister Margaret Thatcher was right: “The problem with socialism is that, eventually, you run out of everybody else’s money.”

Illinois has hit that point that Lady Thatcher described, and the legislative majority is obligated by their fealty to Boss Madigan to refuse to acknowledge reality at all.

Copyright 2017 John F. Di Leo

John F. Di Leo is a Chicagoland-based international trade compliance lecturer, actor and writer. His columns are regularly found in Illinois Review.

Permission is hereby given to forward freely, provided it is uncut and the IR URL and byline are included.

Comments

Di Leo: Springfield – The City That Banned Capitalism

By John F. Di Leo -

Perhaps we should begin by acknowledging the fact that the headline isn’t exactly true. Springfield is a reasonably normal small town in the American Heartland, with a normal enough distribution of conservatives, liberals and moderates.

But Springfield is ruled by Chicago, the King Kong of Illinois politics, which, for all its good points (and yes, there are many), simply can’t help being utterly destructive to everything within reach. And because of its size, its reach is far-ranging indeed.

And the more desperate Chicago gets, confronted with fleeing residents, disappearing employers, and an increasingly impatient and demanding grubber list, the more Chicago acts like King Kong in the movies, smashing everything in sight, a danger to friends and enemies alike.